2022 (11) TMI 299 - HC - Customs

Seeking release of imported goods - issuance of Waiver Certificate under Regulation 10(1) of the Handling of Cargo in Customs Area Regulation 2016 and Regulation 10(1) of Ship Cargo Manifest and Transhipment Regulation, 2018 - HELD THAT - The Commissioner of Appeals allowed the appeal filed by the respondent by referring to clarification issued by the Ministry of Commerce and Industry, Department for Promotion of Industry and Internal Trade, Government of India dated 24 th February, 2022. The clarification was sought for by the respondent with regard to merit of inflatable party items/party decoration foil items. The clarification sought for was whether the said items would fall within the scope of the Toys Quality Control Order, 2020. By clarification dated 24th February, 2022 the said authority had stated that the holiday decorations that are primarily intended for ornamental purpose or Christmas decoration are not included in the scope of the Toys (Quality Control) Order. Regarding the classification, the respondent/writ petitioner would contend that the appeal is pending before the Tribunal at the instance of the revenue and in the meantime the respondent/writ petitioner is willing to comply with the direction issued by the Assistant Commissioner of Customs, Appraising Group VI and they are agreeable to pay the differential duty. The order and direction issued by the learned Single Bench was perfectly justified. In fact, the Assistant Commissioner of Customs, Appraising Group VI rightly understood the scope of the proceedings and took note of the clarification issued by the Ministry of Commerce and Industry dated 24th February, 2022 and balancing the interest of revenue has sent the communication dated 22nd June, 2022 - Appeal dismissed.

Summary

Issues:
1. Release of detained goods and issuance of Waiver Certificate under customs regulations.
2. Dispute over classification of imported goods and applicability of Toys (Quality Control) Order, 2020.
3. Appeal against absolute confiscation order, subsequent appeal decision, and pending tribunal appeal.
4. Justification of the High Court's direction for release of goods pending tribunal appeal.

Analysis:
1. The respondent filed a writ petition seeking a Writ of Mandamus to direct the release of imported goods and issuance of a Waiver Certificate under customs regulations. The Single Bench directed the release of the goods subject to compliance with conditions specified by the Assistant Commissioner of Customs, Appraising Group VI, Kolkata in a communication dated 22nd June, 2022. The revenue appealed against this direction, arguing that goods should not be released during a pending tribunal appeal, especially with a classification dispute.

2. The case involved a dispute over the classification of imported goods and the applicability of the Toys (Quality Control) Order, 2020. The adjudicating authority had ordered absolute confiscation of the goods due to incorrect classification and being a prohibited item under the Toys Order. However, the Commissioner of Customs (Appeals) allowed the respondent's appeal, citing a clarification from the Ministry of Commerce and Industry that the imported items were not covered by the Toys Order. The respondent was willing to comply with the Assistant Commissioner's conditions and pay the differential duty.

3. The appeal before the Tribunal was pending, and the revenue contended that the release of goods should not have been directed by the High Court. The High Court noted that one issue regarding the applicability of the Toys Order had been conclusively resolved by the Ministry's clarification. The Assistant Commissioner's communication balanced the interests of revenue and allowed for release subject to conditions, ensuring the revenue's rights in the pending appeal.

4. The High Court upheld the Single Bench's direction for the release of goods, emphasizing the peculiar circumstances of the case. The High Court confirmed the order and directed the appellant to release the pending consignments after the issuance of a waiver certificate. The respondent was required to comply with the conditions set by the Assistant Commissioner. The High Court clarified that the order did not prejudice the revenue's right to present all grounds before the Tribunal. The appellant was given ten days to comply with the order.

Conclusion:
The High Court dismissed the appeal and confirmed the release direction, emphasizing the balance struck by the Assistant Commissioner and the resolution of one issue through the Ministry's clarification. The High Court's decision aimed to safeguard the revenue's interests while allowing for compliance with specified conditions and pending tribunal appeal rights.